Medicaid Reform in the 1990s

The 1990s saw considerable change in the Medicaid program. At the beginning of the decade, Medicaid was still primarily a program that provided health care coverage to persons receiving cash assistance under the Aid to Families with Disabled Children (AFDC) or Supplemental Security Income (SSI) programs, although expansions of eli­ gibility for low income pregnant women and children had already begun shifting the focus of coverage away from cash recipients. Health care providers were reimbursed directly for services rendered, and little was offered in the way of care management. While fee-for-service (FFS) reimbursement remains important, by the end of the decade State Medicaid programs had taken on a new role as purchasers of managed health care and case management services. At the same time, many States relaxed eligibility standards for Medicaid, extending coverage to higher income pregnant women and chil­ dren or, in some cases, to the general low income uninsured population. In these States, Medicaid reform was a component of a broader effort to increase access to health insurance generally, and to encourage the development of managed care. The States were not the only actors in the Medicaid reform arena. Congress enacted a number of reforms at the nation­ al level, including changes in the laws gov­ erning Medicaid payments to dispropor­ tionate share hospitals (DSH), welfare reform, repeal of the Boren Amendment and enactment of the State Children’s Health Insurance Program (SCHIP).